Belgium’s Financial Services and Markets Authority (FSMA) has kicked off a set of new rules on Sunday to better regulate the cryptocurrency industry. It mandates the registration of all virtual currency service providers that are operating within the country.
The regulations will be applied to virtual currency exchanges and custody wallet providers.
“As from 1 May 2022, any legal person established in Belgium that wants to provide exchange services between virtual currencies and legal currencies, or custody wallet services, within Belgium will have to register with the FSMA in advance,” the FSMA said.
Additionally, the regulator elaborated that all existing virtual currency services providers within the country must notify their activities to the market supervisor by July 1, 2022, and they must apply for registration before September 1, 2022.
Belgium is not the first financial services regulator to impose such restrictions on the crypto industry. It is following the footsteps of the United Kingdom’s Financial Conduct Authority (FCA ), which brought in similar restrictions.
Any failure on the crypto companies' part to comply with these rules might land them in jail for a year or a fine of 10,000 euros (around $10,500).
Crypto Regulations Are Priority
These new restrictions are in line with the European Union’s push to implement the Fifth Anti-Money Laundering Directive, requiring crypto platform providers to report suspicious activities.
Though the FCA introduced the crypto mandates in the pre-pandemic era, its efforts turned out to be highly flawed. Over a period of almost a couple of years, the regulator green-lighted only a handful of crypto companies until now, and many have decided to shut their operations in the country.
Meanwhile, the FSMA is regarded as one of the strict financial market supervisors within the European Union. It actively monitors the markets and sets off alarms against rampant fraudulent trends.
Furthermore, it restricts companies to provide trading services with contracts for differences (CFDs) and other over-the-counter derivative financial instruments, making Belgium one of the very few developed nations to impose a CFDs ban.
